Uninvited drones ruined Putin’s big economic party
We are introducing analytical digests to help you understand Ukraine’s battlefield, politics, and newest technologies.
Editor’s Note:
This story is unusual for our publication; it doesn’t center on a single human story.
Instead, it focuses on developments on the battlefield and the war’s evolving dynamics. We believe this is an important story to tell because, amid the many stories we cover, it can be easy to lose sight of the fact that the war remains the defining reality in Ukraine. Today’s piece is a reminder of that reality and why it matters.
Subscribe to our publication to read more stories from Ukraine.
Tim Mak held a livestream with George Barros, Director of Innovation and Open Source Tradecraft at the Institute for the Study of War (ISW), about the latest on the Russian economy and battlefield situation in Ukraine.
OUR LEAD STORY:
Despite the record number of drones launched against Ukrainian cities and ground attacks on the frontline, May 2026 might be the worst month for Russia since the Ukrainian counteroffensive of autumn 2023. We consulted open-source data aggregators and asked experts about strategic updates on the war in Ukraine so you can know what is happening on the battlefield.
A frontline update: month 51 of the full-scale invasion
On the battlefield, Ukraine is regaining tactical advantage at certain sections of the frontline. According to the analytical group DeepState, the number of Russian ground attacks jumped by 37.5 percent compared to April and reached a record-breaking 7,000, but Russia only captured 14 sq. km of Ukrainian territory. For the first time since October 2023, it endured a negative net gain.
One of Russia’s most problematic objectives is the Donetsk region. After the full occupation of Pokrovsk and Myrnohrad, Russian troops are attempting to infiltrate into Kostiantynivka, a vital transport hub and a fortified area. They are razing the city to make it extremely difficult to defend. The enemy also pressures Ukrainian armed forces next to the village of Rodynske in an attempt to approach Dobropillia, another important transport hub. The situation remains difficult in the direction of Sloviansk, about 40 miles to the north, where the Armed Forces of Ukraine (AFU) risk being surrounded.
In the Kharkiv region, the AFU liberated the village of Odradne and assaulted the enemy positions near Vovchansk, 45 miles away from Kharkiv. However, Russia is accumulating its troops near Vovchansk for a summer offensive and is trying to infiltrate the city of Kupyansk.
In the Zaporizhzhia region, the AFU reclaimed control over territories next to the cities of Stepnohirsk, Orikhiv, and Hulyaipole.
DeepState also reported Ukrainian advances near the Zaporizhzhia, Dnipro, and Donetsk regions’ administrative borders, where Russia has lost about 46 sq. km. of land.
On Thursday’s livestream with The Counteroffensive, Director of Innovation and Open Source Tradecraft at the Institute for the Study of War (ISW) George Barros said that the AFU owe their tactical initiative in this direction to “better campaign planning, better preparation, better intelligence, and then to better innovation and development of… weapons that are allowing the Ukrainians to affect very important Russian targets that were previously in a safe zone.”
One of Ukraine’s recent technological advancements is the domestically made guided aerial bomb Vyrivniuvach (Ukrainian for “leveller”), which is significantly cheaper than American-made analogues.
Less destructive than Russia’s bombs that carry up to 3 metric tons of explosives, it can give Ukrainian forces tactical parity on the frontline. With its 250-kg warhead, it can strike objects 60 to 80 km away from its airborne deployment, or up to 40 km into Russia’s territory past its air defense, military expert Viktor Kevliuk of the Ukrainian security think tank Center for Defence Strategies (CDS) said. Still, he noted that no bomb is effective without proper carriers.
“It depends on whether this bomb is integrated into the weapon control system of the planes provided by our allies,” he told The Counteroffensive. “I hope that all our F-16s, all our Mirages can drop this bomb, or our golden hands will create the necessary integration.”
Another distinct feature of Ukraine’s warfare is the effective use of its military personnel. On June 4, President Zelenskyy wrote an open letter to Putin, in which he pointed out the human dimension of Russia’s losses.
“I received a report on the losses of your army in May. Again, this is more than 30,000 killed and severely injured Russians… We know that 63 percent of your frontline casualties are the dead and 37 percent are the injured,” he said and claimed that Ukraine is losing one soldier for every 5 or 6 Russian troops.
If there is any way to maintain the tactical success Ukraine gained on the battlefield, it should be by using our best talents: building alliances, valuing people, and fostering innovative approaches to the war.
Russia’s war economy: pompous but fragile
For Russia’s ability to wage this war and its overall economy, the past month showed a sharp contrast between a public image of riches and an actual financial state.
Today the St. Petersburg International Economic Forum is coming to an end. In a conversation with The Counteroffensive, Serhii Fursa, deputy director at Kyiv-based investment company Dragon Capital, called it purely demonstrative.
“This forum is the answer to all these publications and conversations [claiming] that everything is bad,” he said. “They are trying to make it as bright and expensive as possible to convince themselves and everyone around that everything is fine.”
However, the backdrop of this show is murky, with Ukrainian drones attending the opening ceremony uninvited and a looming economic recession. On June 1, Bloomberg reported that senior Russian officials are concerned about whether Russia can afford its war on Ukraine any longer without additional funding. In the first quarter of 2026, its budget deficit already exceeded the projected annual 3.79 trillion rubles ($51.35 billion) by 55 percent, reaching 5.88 trillion ($79.4 billion).
According to Serhii Fursa, Russia’s economy is currently stagnating.
“The real income of the population is falling,” he explained. “On the other hand, there are constant reports that expensive stores are being closed, cheap ones are being opened, general retail is being reduced, and so on.”
Fursa noted that Russia will not collapse overnight, but the situation is critical because the state budget remains the primary source for financing the war. In 2022-2025, Russia mostly covered the costs from “the barrel” of the National Welfare Fund, filled by excessive revenues from oil and gas sales over the past two decades. Before the full-scale invasion of Ukraine, it held about $113.5 billion in liquid assets (foreign currency and gold). By 2026, the Fund shrinked to $52.9 billion, so further attempts to close the budget gap at its cost will effectively drain it.
The war that the U.S. and Israel are fighting in the Middle East was of unexpected help to Russia, but not quite sustainably. Due to supply disruptions oil prices climbed as high as $120 per barrel, so Russia’s oil revenues in the short term also increased. However, they must remain at that level for a whole year before Russia’s economic situation notably improves.
Such a scenario seems unlikely, as the U.S. and Iran are clearly disadvantaged by the prolonged war and have expressed interest in ending it sooner. A more feasible solution for Russia, according to Serhii Fursa, lies in printing more money; however, this step can weaken the ruble and push prices on the internal market even higher.
“If they face a choice to either stop the war or fight, they can print money for a while. This will undermine the economic situation even more, but this is a decision that Putin can make.”
He added that the limited printing of money, as covertly as possible, is already underway, along with new inflation risks.
Regardless of the path Russia chooses, its war against Ukraine is getting increasingly costly and changing the way Russians live. In the long term, if it becomes practically impossible for Russia to evade sanctions and Ukraine’s strikes on oil infrastructure continue, the crisis can eventually push the war towards the end.
Second front in Europe?
At the end of April, ISW analysts warned about Russia’s possible plans to invade one of the Baltic states. According to their report, the Security Council of Russia has accused Lithuania of militarization and creating “a hotbed of tension” near Kaliningrad Oblast. A month later, Russia threatened to take the Baltic states to the International Court of Justice for “oppression of Russians.”
Amid Russia’s increasingly bold actions, NATO states are testing their military capabilities. From May 9 to 13, more than 18,000 soldiers from 13 countries, including Ukraine, participated in a Swedish-led military exercise on the island of Gotland, training to repel, among other things, a head-on Russian attack. On May 18, Russia and Belarus began their own joint nuclear drills, and the Kremlin’s spokesperson Dmitry Peskov called it a signal to Europe and NATO.
On May 25-26, after a sequence of accidental Ukrainian drone incursions into the airspace of the Baltics, Lithuania tested its drone interception systems. Three days later, a Russian drone hit an apartment building and injured two people in the city of Galati, Romania. Bucharest aims to strengthen its air defense with aircraft and radars from France and other NATO members.
ISW’s Barros believes that aiding Ukraine and bolstering NATO’s capabilities should be parallel, as the possibility of an escalation in the eastern NATO states is closely linked to the situation in Ukraine.
“What happens when Putin essentially threatens NATO and says, ‘Hey, NATO is not prepared to deal with 600 drones entering the airspace in one night. So we can cause a crisis in the Baltic states and hit you with a bunch of drones, or you can basically just give up and give us Ukraine and let us just finish our war here?’” he asked, and warned that the Allies have to be ready for a major military threat from Russia.
Ukraine, alongside the Baltics, also considers a potential threat from Belarus similar to that of the invasion of 2022. At the end of May, President Zelenskyy convened his Staff to discuss possible offensive scenarios from the north. He claimed that at least five of them have been considered, and Ukraine is getting ready to defend itself in the Kyiv and Chernihiv regions.
Viktor Kevliuk of CDS does not exclude the possibility of invasion but deems it rather low. He points out that Ukrainian intelligence, which closely monitors the situation, did not report any strike units formed on the border. Also, the Belarusian Armed Forces are too small to carry out a major offensive against Ukraine.
What concerns him more are the close economic, political, and military ties between Belarus and Russia.
“We must understand that the self-proclaimed Belarusian dictator and his country are deeply integrated into the Russian Federation, that’s called Union State. Belarus avoids open participation in hostilities, but it provided its territory, airspace, and intelligence units, which conduct radio-technical and radio-electronic intelligence against us,” he warned. “Repair units are active, too, and Belarus has given a lot of ammunition from its reserves to the Russians.”
As low as it seems, Russia uses the probability of an invasion for its hybrid warfare. Amid its heavy losses in May, it attempts to intimidate Ukrainians in the border regions and divert military forces from the frontline.
Despite its numerical superiority, Russia sees Ukrainian soldiers as a major threat. No wonder, as they can give the invaders many more hellish months.
Interested to know what’s going on in Ukraine? I recommend reading these stories about the latest updates:
NEWSFLASH: Zelenskyy, in first Putin letter, says ceasefire can’t wait for Trump
Russian drone injures two in NATO member Romania
NEWSFLASH: Russia’s scariest attack yet
Editor’s Note:
This story is unusual for our publication; it doesn’t center on a single human story.
Instead, it focuses on developments on the battlefield and the war’s evolving dynamics. We believe this is an important story to tell because, amid the many stories we cover, it can be easy to lose sight of the fact that the war remains the defining reality in Ukraine. Today’s piece is a reminder of that reality and why it matters.
Subscribe to our publication to read more stories from Ukraine.
NEWS OF THE DAY
By Oleksandra Poda
Good morning to readers; Kyiv remains in Ukrainian hands.
PUTIN SEES NO POINT IN MEETING WITH ZELENSKYY: On June 5, at the St. Petersburg International Economic Forum (SPIEF), Putin rejected Zelenskyy’s proposal for an in person meeting. “So far, I see no point,” the Russian leader said, calling Zelenskyy’s open letter rude. This came after Zelenskyy sent a letter, published on Thursday, to Putin proposing a face-to-face meeting.
Zelenskyy responded in an evening address: “Unfortunately, the Russian side is once again choosing war again.” Trump said in Washington that personal talks between Zelenskyy and Putin would be great.
UKRAINIAN NAVAL DRONE EXPLODES IN ROMANIAN PORT: A Ukrainian naval drone exploded in the port of Constanta, Romania, on June 5. This is the second time in a week that a Ukrainian drone has exploded in Romania, as Ukraine blamed Russian electronic warfare for throwing the drones off course. It reached out to Romania in advance to warn them, after which Romania evacuated the area. The explosion caused no casualties.
The President of the European Commission called the incident “a direct consequence of Russia’s war against Ukraine.”
PUTIN LIES ABOUT SUCCESS ON THE FRONT, ISW SAYS: On June 5, Putin claimed that Russian troops were advancing along the entire front line and had occupied 85 percent of Donetsk region and 80 percent of Zaporizhzhia region, and had reached drone parity with Ukraine. The Institute for the Study of War investigated each of these claims, noting that they were false.
In April and May 2026, Ukrainian forces liberated more territory than Russia captured, underscoring Russia’s declining combat performance and Ukraine’s success in halting Russia’s spring-summer offensive.
DOG OF WAR
Oleksandra lives on an island in Kyiv, where corgis live in literally every corner of the island. This happy pup ran up to meet her in one of the shops in the area.
Stay safe out there.
Best,
Oleksandra.
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